BILL NUMBER: SB 1505	CHAPTERED  09/30/00

	CHAPTER   1026
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	PASSED THE ASSEMBLY   AUGUST 28, 2000
	AMENDED IN ASSEMBLY   AUGUST 25, 2000
	AMENDED IN ASSEMBLY   AUGUST 7, 2000
	AMENDED IN ASSEMBLY   JUNE 14, 2000
	AMENDED IN SENATE   MAY 30, 2000
	AMENDED IN SENATE   MAY 16, 2000
	AMENDED IN SENATE   APRIL 13, 2000

INTRODUCED BY   Senator Burton

                        FEBRUARY 15, 2000

   An act to amend Sections 22141, 24410.5, 24415, and 24417 of, and
to add Section 24410.6 to, the Education Code, relating to state
teachers' retirement.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1505, Burton.  State Teachers' Retirement System:  minimum
benefits.
   The Teachers' Retirement Law establishes minimum annual retirement
allowance amounts that are payable to retired members, option
beneficiaries, and surviving spouses who were receiving an allowance
on January 1, 2000, and also provides for additional distributions to
restore the purchasing power of retirement allowances to specified
levels.
   This bill would additionally make those minimum allowance amounts
applicable to retired members, option beneficiaries, and surviving
spouses who are receiving an allowance on January 1, 2001, and who
meet other specified criteria, increase those minimum allowance
amounts for certain other retired members, and provide that those
benefits shall be initially paid on or before September 1, 2001,
except as specified.  The bill would also provide for additional
distributions to restore the purchasing power of those minimum
allowance amounts provided for in the bill , in existing law, and in
AB 429, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 22141 of the Education Code is amended to read:

   22141.  Notwithstanding Section 22140, "improvement factor" means
an increase of 2 percent in benefits provided under Sections 24408
and 24409 for each year commencing on September 1, 1981, under
Section 24410.5 for each year commencing on September 1, 2001, and
under Sections 24410.6 and 24410.7 for each year commencing on
September 1, 2002.  The factor shall not be compounded nor shall it
be applicable to annuities payable from the accumulated annuity
deposit contributions or the accumulated tax-sheltered annuity
contributions.  The Legislature reserves the right to adjust the
amount of the improvement factor up or down as the economic
conditions dictate.  No adjustments of the improvement factor shall
reduce the monthly retirement allowance or benefit below that which
would be payable to the recipient under this part had this section
not been enacted.
   References in this section to Section 24410.7 shall be applicable
only if that section is added by Assembly Bill 429 of the 1999-2000
Regular Session and becomes effective on or before January 1, 2001.

  SEC. 2.  Section 24410.5 of the Education Code is amended to read:

   24410.5.  (a) Notwithstanding any provision of this part,
including, but not limited to, subdivision (e) of Section 22664, the
annual allowance payable on the effective date of this section to a
retired member, an option beneficiary, or a surviving spouse
receiving an allowance pursuant to either Section 23805 or 23855
shall not be less than the amount identified in the following
schedule for the number of years of the member's credited service
under the Defined Benefit Program at the time of the member's
retirement, disability, or death, excluding service credited pursuant
to Sections 22714, 22715, 22717, and 22826, after the application of
all allowances and allowance increases authorized by this part,
including those specified in Sections 24412 and 24415, as those
sections read on December 31, 1999, and excluding annuities payable
from the accumulated annuity deposit contributions or the accumulated
tax-sheltered annuity contributions:


    20 years of credited service ..............   $15,000
    21 years of credited service ..............   $15,500
    22 years of credited service ..............   $16,000
    23 years of credited service ..............   $16,500
    24 years of credited service ..............   $17,000
    25 years of credited service ..............   $17,500
    26 years of credited service ..............   $18,000
    27 years of credited service ..............   $18,500
    28 years of credited service ..............   $19,000
    29 years of credited service ..............   $19,500
    30 years or more of credited service ......   $20,000

   (b) Notwithstanding subdivision (a), the amount identified in the
schedule in subdivision (a) shall be reduced:
   (1) By 50 percent for a beneficiary receiving an allowance under
Option 3 or Option 7.
   (2) By one-third for an option beneficiary receiving an allowance
under Option 4 after the death of the member or for a member
receiving an allowance under Option 4 after the death of the option
beneficiary.
   (3) By 50 percent for an option beneficiary receiving an allowance
under Option 5 after the death of the member or for a member
receiving an allowance under Option 5 after the death of the option
beneficiary.
   (4) By a percentage equal to 100 percent minus the percentage of
the member's modified allowance received by the option beneficiary
for each option beneficiary receiving an allowance under Option 8.
   (5) By 60 percent for a surviving spouse receiving an allowance
pursuant to subdivision (a) of Section 23805.
   (6) By 50 percent for a surviving spouse receiving an allowance
pursuant to subdivision (c) of Section 23805 or Section 23855.
   (c) A member to whom a disability allowance is payable on January
1, 2000, who subsequently receives a service retirement allowance
pursuant to Section 24213 shall, upon the retirement for service,
receive an increase in the service retirement allowance pursuant to
this section.
   (d) A member, beneficiary, or surviving spouse may receive an
allowance pursuant to this section only if the member was an active
member at the time of the member's retirement, or death and, for
those members who retired for service, the member retired on or after
age 55, unless the member's allowance was not subject to a reduction
due to retirement prior to an age specified in this part.
   (e) A retired member, option beneficiary, or surviving spouse
subject to this section shall receive the annual minimum allowance
pursuant to this section unless the system receives in writing, on a
form prescribed by the system, notification from the member, option
beneficiary, or surviving spouse before May 1, 2000, of his or her
election not to receive the increase provided under this section.
   (f) Benefits payable under this section shall be initially paid by
the system on July 1, 2000.
  SEC. 3.  Section 24410.6 is added to the Education Code, to read:
   24410.6.  (a) Notwithstanding any provision of this part,
including, but not limited to, subdivision (e) of Section 22664, and
except as provided in subdivisions (b) and (c), the annual allowance
payable on the effective date of this section to a retired member, an
option beneficiary, or a surviving spouse receiving an allowance
pursuant to either Section 23805 or 23855 shall not be less than the
amount identified in the following schedule for the number of years
of the member's credited service under the Defined Benefit Program at
the time of the member's retirement, disability, or death, excluding
service credited pursuant to Sections 22714, 22715, 22717, and
22826, after the application of all allowances and allowance
increases authorized by this part, including those specified in
Sections 24412 and 24415, as those sections read on December 31,
2000, and excluding annuities payable from the accumulated annuity
deposit contributions or the accumulated tax-sheltered annuity
contributions:


    20 years of credited service ..............   $15,000
    21 years of credited service ..............   $15,500
    22 years of credited service ..............   $16,000
    23 years of credited service ..............   $16,500
    24 years of credited service ..............   $17,000
    25 years of credited service ..............   $17,500
    26 years of credited service ..............   $18,000
    27 years of credited service ..............   $18,500
    28 years of credited service ..............   $19,000
    29 years of credited service ..............   $19,500
    30 years or more of credited service ......   $20,000

   (b) Notwithstanding subdivision (a), the amount identified in the
schedule in subdivision (a) shall be reduced:
   (1) By 50 percent for a beneficiary receiving an allowance under
Option 3 or Option 7.
   (2) By one-third for an option beneficiary receiving an allowance
under Option 4 after the death of the member or for a member
receiving an allowance under Option 4 after the death of the option
beneficiary.
   (3) By 50 percent for an option beneficiary receiving an allowance
under Option 5 after the death of the member or for a member
receiving an allowance under Option 5 after the death of the option
beneficiary.
   (4) By a percentage equal to 100 percent minus the percentage of
the member's modified allowance received by the option beneficiary
for each option beneficiary receiving an allowance under Option 8.
   (5) By 60 percent for a surviving spouse receiving an allowance
pursuant to subdivision (a) of Section 23805.
   (6) By 50 percent for a surviving spouse receiving an allowance
pursuant to subdivision (c) of Section 23805 or Section 23855.
   (c) A benefit shall be paid pursuant to this section if both of
the following apply:
   (1) The retired member, the option beneficiary, or the surviving
spouse had an allowance payable on January 1, 2000, and was not
eligible to receive a benefit pursuant to Section 24410.5.
   (2) The retired member or the member whose service was the basis
of the allowance payable to the option beneficiary or surviving
spouse was one of the following:
   (A) A member who retired prior to the age of 55 years, provided
the minimum allowance specified in subdivision (a) shall be reduced
to an amount equal to that minimum allowance multiplied by the ratio
of the percentage of final compensation per year of credited service
on which the member's initial allowance was based to 1.4.
   (B) A member who was paid a retirement allowance pursuant to
Section 24213, if the member's credited service, excluding service
credited pursuant to Sections 22714, 22715, 22717, and 22826, was
less than 20 years but whose projected service to normal retirement
age, excluding service credited pursuant to Sections 22714, 22715,
22717, and 22826, was equal to or greater than 20 years, provided
that the minimum allowance payable shall be based on 20 years of
credited service.
   (C) A member who retired as an inactive member.
   (D) A member who retired prior to March 21, 1974, with 19.5 years
or more of credited service, provided that the minimum allowance
payable shall be based on 20 years of credited service.
   (E) A member who retired on or after March 21, 1974, and prior to
January 1, 2000, and whose credited service, excluding service
credited pursuant to Sections 22714, 22715, 22717, and 22826, was
less than 20 years, but whose credited service, excluding service
credited pursuant to Sections 22714, 22715, and 22826, but including
service credited pursuant to Section 22717, was equal to or greater
than 20 years, provided that the minimum allowance payable shall be
based on 20 years of credited service.
   (F) A member whose credited service, excluding service credited
pursuant to Sections 22714, 22715, and 22826, but including credited
service that a court has ordered be awarded to the member's nonmember
spouse pursuant to Section 22652, equaled at least 20 years,
provided that the amount payable to the member pursuant to this
section shall be based on the amount of service credited to the
member, excluding service credited pursuant to Sections 22714, 22715,
22717, and 22826, and the amount awarded to the nonmember spouse,
and further provided that the minimum allowance specified in
subdivision (a) shall be reduced to an amount equal to that minimum
allowance multiplied by the ratio of (i) the amount of service
credited to the member, excluding service credited pursuant to
Sections 22714, 22715, 22717, and 22826, to (ii) the sum of the
amount of service credited to the member, excluding service credited
pursuant to Sections 22714, 22715, 22717, and 22826, and the amount
awarded to the nonmember spouse.
   (d) A benefit shall be paid pursuant to this section to a retired
member receiving a benefit pursuant to Section 24410.5 if (1) the
member meets the criteria of subparagraph (F) of paragraph (2) of
subdivision (c), and (2) the allowance payable under that
subparagraph, after the application of all allowances and allowance
increases authorized by this part, including those specified in
Sections 24412 and 24415, is greater than the allowance payable under
Section 24410.5, after the application of all allowances and
allowance increases authorized by this part, including those
specified in Sections 24412 and 24415.
   (e) A retired member, option beneficiary, or surviving spouse
subject to this section shall receive the annual minimum allowance
pursuant to this section unless the system receives in writing, on a
form prescribed by the system, notification from the member, option
beneficiary, or surviving spouse of his or her election not to
receive the increase provided under this section.
   (f) Benefits payable under this section shall be initially paid by
the system on or before September 1, 2001.
  SEC. 4.  Section 24415 of the Education Code is amended to read:
   24415.  (a) The proceeds of the Supplemental Benefit Maintenance
Account shall be distributed annually in quarterly supplemental
payments commencing on September 1, 1990, to retired members,
disabled members, and beneficiaries.  The amount available for
distribution in any fiscal year shall not exceed the amount necessary
to restore purchasing power up to 75 percent of the purchasing power
of the initial monthly allowance after the application of all
allowance increases authorized by this part, including those
specified in Section 24412, but excluding those provided pursuant to
Sections 22410.5, 24410.6, and 24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries whose
allowances, after sequentially applying the annual improvement factor
as defined in Sections 22140 and 22141, and the annual supplemental
payment as defined in Section 24412, have the lowest purchasing power
percentage.  The purchasing power calculation for each individual
shall be based on the change in the All Urban California Consumer
Price Index between June of the calendar year of retirement and June
of the fiscal year preceding the fiscal year of distribution.  In any
year in which the purchasing power of the allowances of all retired
members, disabled members, and beneficiaries equals not less than 75
percent and additional funds remain from the allocation authorized by
this section, those funds shall remain in the Supplemental Benefit
Maintenance Account for allocation in future years.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The benefits provided by subdivision (b) are not cumulative,
not part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The adjustments authorized by this section are vested only up
to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Sections 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
75 percent of the change in the All Urban California Consumer Price
Index between January 2000, and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to those benefits.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
  to subdivision (b), the purchasing power calculation shall be based
on 75 percent of the change in the All Urban California Consumer
Price Index between January 2001, and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
   References in this section to Section 24410.7 shall be applicable
only if that section is added by Assembly Bill 429 of the 1999-2000
Regular Session and becomes effective on or before January 1, 2001.

  SEC. 5.  Section 24417 of the Education Code is amended to read:
   24417.  (a) The proceeds of an auxiliary Supplemental Benefit
Maintenance Account shall be distributed annually in quarterly
supplemental payments, commencing when funds in the Supplemental
Benefit Maintenance Account are insufficient to support 75 percent,
to retired members, disabled members, and beneficiaries.  The amount
available for distribution in any fiscal year shall not exceed the
amount necessary to restore purchasing power up to 75 percent of the
purchasing power of the initial monthly allowance after the
application of all allowance increases authorized by this part,
including those specified in Section 24412 and Section 24415, and
excluding those provided pursuant to Sections 24410.5, 24410.6, and
24410.7.
   (b) The net revenues to be distributed shall be allocated among
those retired members, disabled members, and beneficiaries whose
allowances, after sequentially applying the annual improvement factor
as defined in Sections 22140 and 22141, and the annual supplemental
payment as defined in Section 24412 and Section 24415, have the
lowest purchasing power percentage.  The purchasing power calculation
for each individual shall be based on the change in the All Urban
California Consumer Price Index between June of the calendar year of
benefit effective date and June of the fiscal year preceding the
fiscal year of distribution.
   (c) The allowance increase shall not be applicable to annuities
payable from the accumulated annuity deposit contributions or the
accumulated tax-sheltered annuity contributions.
   (d) The benefits provided by subdivision (b) are not cumulative,
nor part of the base allowance, and will be payable only to the
extent that funds are available from the Supplemental Benefit
Maintenance Account and the auxiliary Supplemental Benefit
Maintenance Account.  The board shall inform each recipient of the
contents of this subdivision.
   (e) The distributions authorized by this section are vested only
up to the amount payable as a result of the annual appropriation made
pursuant to Section 22954 and shall not be included in the base
allowance for purposes of calculating the annual improvement defined
by Section 22140 and 22141.
   (f) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Section 24410.5
for members and beneficiaries receiving benefits pursuant to
subdivision (b), the purchasing power calculation shall be based on
75 percent of the change in the All Urban California Consumer Price
Index between January 2000, and June of the fiscal year preceding the
fiscal year of distribution, after the application of increases
authorized by Section 24412 that are made to those benefits.
   (g) Notwithstanding subdivision (b), for purposes of restoring the
purchasing power of benefits provided pursuant to Sections 24410.6
and 24410.7 for members and beneficiaries receiving benefits pursuant
to subdivision (b), the purchasing power calculation shall be based
on 75 percent of the change in the All Urban California Consumer
Price Index between January 2001, and June of the fiscal year
preceding the fiscal year of distribution, after the application of
increases authorized by Section 24412 that are made to the allowances
provided pursuant to Sections 24410.6 and 24410.7.
   References in this section to Section 24410.7 shall be applicable
only if that section is added by Assembly Bill 429 of the 1999-2000
Regular Session and becomes effective on or before January 1, 2001.
